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United States v. Coker

October 21, 2010



This matter is before the Court on Defendant Robbin M. Coker‟s ("Defendant‟s") Motion to Dismiss (Doc. 12) Plaintiff the United States of America‟s ("Plaintiff‟s") First Amended Complaint ("FAC") (Doc. 5). The FAC brings a claim for relief against Defendant under the Federal Debt Collection Procedures Act ("FDCPA"), 28 U.S.C. §§ 3001 et seq. Defendant seeks dismissal of the FAC based on Federal Rule of Civil Procedure 12(b)(2), 12(b)(3), 12(b)(4) and 12(b)(5). Plaintiff opposes the motion.*fn1 Defendant did not submit a reply brief addressing any of the points raised in Plaintiff‟s opposition brief. For the reasons set forth below, Defendant‟s motion is denied.

I. Factual and Procedural Background

The FAC alleges that on May 1, 1996, Defendant signed an "Application/Promissory Note" consolidating various college and law school loans through the Student Marketing Loan Association‟s ("Sallie Mae") Smart Loan Account. The loan amounted to $60,466.00 at 9% interest per annum. Sallie Mae disbursed the loan proceeds on December 17, 1996. In June 1998, Defendant defaulted on the loan. Plaintiff alleges that pursuant to Title IV of the Higher Education Act of 1965, as amended 20 U.S.C. §§ 1071-1087ii, the loans were guaranteed loans for which the United States Department of Education provides reinsurance to the guarantor in the event of a debtor‟s default. When Defendant defaulted, the loan guarantor paid Sallie Mae its claim for the unpaid debt, and then Plaintiff reimbursed the guarantor under the reinsurance agreement. The guarantor assigned Plaintiff its right and title to the loan on August 18, 2003. Plaintiff alleges that it has demanded payment, but Defendant has failed to repay the defaulted loan. As of August 28, 2009, Defendant owes Plaintiff $138,867.73, and interest continues to accrue on the principal sum at a daily rate of $17.25. Plaintiff also seeks to recover a surcharge of 10% of the amount due and owing to compensate it for its attorneys‟ fees and collection costs pursuant to 28 U.S.C. § 3011.

Plaintiff filed the original complaint (Doc. 1) in this Court on July 21, 2009. Plaintiff filed the FAC on August 28, 2009.

Shortly thereafter, Defendant filed for bankruptcy under Chapter 13 of the Bankruptcy Code. Accordingly, this case was stayed pursuant to an automatic stay. (Doc. 6). The stay was lifted on January 21, 2010 when Defendant‟s bankruptcy petition was dismissed. (Doc. 7). Plaintiff served Defendant in North Carolina via substituted service on January 28, 2010. Defendant allegedly no longer resides in California, and now moves to dismiss the FAC for lack of personal jurisdiction, improper venue, insufficient process and insufficient service of process.

II. Opinion

A. Legal Standard

Federal Rule of Civil Procedure 12(b) sets forth defenses that may be raised in response to claims for relief, including lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, insufficient process, insufficient service of process, failure to state a claim, and failure to join a party under Rule 19. Fed. R. Civ. Proc. 12(b). A motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed. If a pleading sets out a claim for relief that does not require a responsive pleading, an opposing party may assert at trial any defense to that claim. No defense or objection is waived by joining it with one or more other defenses or objections in a responsive pleading or in a motion. Id. A party waives any defense listed in Rule 12(b)(2)-(5) by (A) omitting it from a motion in the circumstances described in Rule 12(g)(2); or (B) failing to either make it by motion under this rule or include it in a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a matter of course. Fed. R. Civ. Proc. 12(h).

B. Defenses under Federal Rule of Civil Procedure 12(b)

1. Federal Rule of Civil Procedure 12(b)(2)

Defendant moves the Court to dismiss the FAC for lack of personal jurisdiction. Plaintiff contends that the Court has personal jurisdiction over the FAC. Federal Rule of Civil Procedure 12(b)(2) allows a party to assert lack of personal jurisdiction as a defense. When a defendant challenges personal jurisdiction, the plaintiff bears the burden of establishing the court‟s personal jurisdiction over the defendant. Cubbage v. Merchant, 744 F.2d 665,667 (9th Cir. 1984). If the district court does not conduct an evidentiary hearing on the jurisdictional challenge, a plaintiff need only make a prima facie showing of personal jurisdiction. Action Embroidery Corp. v. Atlantic Embroidery, Inc., 368 F.3d 1174, 1177 (9th Cir. 2004). In determining if a prima facie showing has been made, the court must take the uncontroverted allegations of the complaint as true, and conflicts between the parties‟ affidavits must be resolved in plaintiff‟s favor. Id.

Defendant‟s Motion to Dismiss alleges that Defendant resides in North Carolina, and is therefore not subject to personal jurisdiction in California. However, as Plaintiff points out, the FDCPA authorizes nationwide service of process over defendants indebted to the United States. 28 U.S.C. § 3004. The Ninth Circuit has found that federal statutes that authorize the service of process beyond the boundaries of the forum state likewise expand the personal jurisdiction of the courts within that forum. See Go Video, Inc. v. Akai Elec. Co., Ltd., 885 F.2d 1406, 1414 (9th Cir. 1989) (upholding personal jurisdiction over a foreign corporation under Section 12 of the Clayton Act, 15 U.S.C. § 22). The FDCPA‟s nationwide service of process provision similarly confers national jurisdiction. Reese Bros. V United States Postal Service, 477 F. Supp. 2d 31 (D.D.C. 2007), citing Go-Video, 885 F.2d at 1414.

Furthermore, "when a statute authorizes nationwide service of process, national contacts analysis is appropriate. In such cases, due process demands a showing of minimum contacts with the United States with respect to foreign defendants before a court can assert personal jurisdiction. Action Embroidery, 368 F.3d at 1180 (holding that a Virginia corporation operating in the United States clearly had such minimum contacts).

Thus, Plaintiff need only show that Defendant has sufficient minimum contacts with the United States so as not to violate the "traditional notions of fair play and substantial justice.‟ Reese, 477 F. Supp. 2d at 39, quoting Int‟l Shoe Co., v. Washington, 326 U.S. 310, 316 (1945). The evidence submitted by Plaintiff shows that Defendant is an attorney licensed by the State Bar of California, maintains an active law practice in Sacramento, California and filed two bankruptcy petitions on behalf of a client in the Eastern District shortly after filing the present motion. Defendant‟s motion alleged that Defendant is a resident of North Carolina, but did not address Defendant‟s California law practice. Nor did Defendant submit any evidence challenging or denying these California contacts. Accordingly, Plaintiff has established the Defendant has minimum ...

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